Category: Economics

A Posse and Grenades to Overawe South Carolina

On November 24, 1832, “the tariff acts were proclaimed void and not binding upon this State or its citizens,” after February 1, 1833. South Carolina Gov. Robert Y. Hayne declared the use of federal force in an attempt to collect duties after that date would be met by the State’s secession from the 1789 constitution. This would of course make South Carolina an independent country.

In reply to South Carolina’s decision not to comply with the increased and what it believed to be an unconstitutional tariff, Andrew Jackson threatened to fill that State with 100,000 troops raised from the other States, which he referred to as “a posse.” His vice-president later said that Jackson “yearned to lead this force in person.”

A Posse and Grenades to Overawe South Carolina

New York politician and Vice President Martin Van Buren politely disagreed with Jackson’s contention that the mere raising of troops by South Carolina, i.e., State militia, constituted actual treason. Even Jackson’s close political advisor regretted this wording in the President’s proclamation, which he saw as inviting trouble. This advisor saw that the root of the issue was a high protective tariff which went above and beyond a constitutional tariff to support the expenses of the federation’s government. The latter simply advised Jackson that “a gesture toward tariff reduction might pave the way to a happy solution of everything.”

“Mr. Van Buren’s anxieties arose chiefly from the fact that, like many others, he regarded the crisis through the spectacles of partizan politics . . . who feared a break with Southern leaders, notably those of Virginia. He feared the political aftermath of a break with them now, as Jackson had thrown such considerations to the winds, placing himself militantly at the head of union sentiment of the nation, irrespective of person or party.

This man of caution had raised two points which the man of action could not ignore:

The first concerned the definition of treason of actual treason and the constitutional right of the Executive to intervene in a State’s affairs. Legally he could do so only (1.) at the request of the Governor to suppress insurrection, or (2.) on his own initiative, to enforce the laws of Congress [if the State remained as a member of the federation].

Jackson dispatched seven revenue cutters and a ship of war to Charleston harbor, anchoring off the battery with their guns commanding the fashionable waterfront lined with the homes and brick walled gardens of the city’s elite.

“No State or States,” the President wrote Joel Poinsett, leader of the State’s unionists, “has a right to secede . . . Nullification therefore means insurrection and war; and other States have a right to put it down. I will . . . have the leaders arrested and arraigned for treason . . . in forty days I can have within the limits of South Carolina fifty-thousand men, and in forty more days more another fifty thousand.”

Poinsett, a veteran of the Mexican War and eager to suppress his fellow citizens desire for political independence, wrote Jackson on November 16, 1832: “Grenades and small rockets are excellent weapons in a street fight. I would like to have some of them.”

(The Life of Andrew Jackson. Chapter XXX, Marquis James. Bobbs Merrill Company, 1938, pg. 609; 615)

Mankind’s War Fetish

 

English author and commentator H.G. Wells began writing newspaper articles in August 1914 commenting upon what was to be termed the “World War”; the articles would become assembled in a book entitled The War That Will End War. Arguing that the Central Powers led by Germany and Italy commenced the war, he saw that only the destruction of German militarism could end the conflagration.

American intervention – pursued by a president who was elected on a promise of keeping us out of the war – was decisive as cash advances to Britain, France and Russia amounting to some $9.6 billion stoked the fires. Postwar, America became the world’s banker with net foreign assets of around $11 billion by the end of 1919.

In 1918, Germany was defeated, its Kaiser banished, and punitive peace terms burdened the German people. Predictably, a nationalist arose within Germany who rebuilt his country’s military and ironically with French assistance through the Czech’s Skoda Works. Only twenty years after the Versailles Treaty, it was back to war. What is called World War Two – more accurately called the second half of the World War – led to an estimated 56 million military and civilian deaths, and an additional 38 million dead from war-related disease and famine.

Below, author Emil Ludwig cites the costs of the war to end war.

Mankind’s War Fetish

“The World War, which was on the verge of breaking out in the very first opening years of the opening century, is the great liquidation of debts created in the previous era and we desire and demand that it be associated with the nineteenth century. The second Hague Conference of 1907 was only a farce. During the weeks for which the third meeting was set in the summer of 1915, oratory could no longer be heard in The Hague due to the nearby thundering of cannon in Europe.

The cost of armament during the years from 1910 to 1914 amounted to 1.8 billions of dollars for Austria and Germany together and 2.4 billions for France and Russia – more than 4 billion. Yet these were small sums compared with those piled up by the War. On land and sea and in the air, 12,990,570 soldiers were killed in the World War. The war cost the combined combatants 250,000,000 billions of dollars – half of their combined national wealth. Thus, within four years, for no reason and without any essential consequences, Europe had sent up in smoke half of all it had gathered together during the preceding centuries. How should we characterize an act of this kind on the part of a large bank or a powerful family?

In so far as the victorious powers are concerned, France was a creditor nation to the extent of 30 billions before the war and a debtor to the extent of 31 billions afterward. During the struggle, the French national wealth decreased by a third; that of England by one fourth. Even the United States government had to expend during two years more than it had laid out in the course of over a century; and if in spite of this fact it remains today the creditor of the world, the reason is not participation in the second half of the war but rather abstention during the war’s first half. The smaller countries which remained neutral are in a relatively better position than any of the imperialist states.

With the exception of America, all the warring countries lost millions of men and billions of money; and any territory gained in the process at the expense of the conquered peoples is of intrinsic worth only in the case of new states established at the end.

Even the single positive result of the World War – the destruction of four realms anachronistically ruled by emperors, and the creation of eleven republics – was therefore purchased at a price which, in civil life, only an insane person would pay.”

“We punish an individual guilty of assault or murder, but the massacre of a people is considered a glorious deed.” Seneca

“Standing armies should in time cease to be, for they constitute a perennial threat of war to other states . . .”  Immanuel Kant

(Whither Mankind: A Panorama of Modern Civilization. Charles A. Beard, editor. Longmans, Green & Company, 1928, pp. 178-179)

 

New England’s Slave Past

African slaves existed in colonial New England as early as 1634 – well before any were in what became the American South – and by 1774 New England’s slave population totaled over 16,000. Interestingly, New England clergymen, merchants and lawyers then commonly owned at least one slave; in 1774 Connecticut’s slave population totaled over 5,000. Earlier in that century New England had surpassed England as the center of the nefarious transatlantic slave trade, which carried African slaves first to the West Indies to live and likely die as sugar cane laborers, then back to New England with sugar to make more rum with which to trade to African tribes for their slaves.

New England’s Slave Past

“[New England’s early inhabitants] were of homogenous origin, nearly all tracing their descent to English emigrants of the reigns of Charles the First, and Charles the Second. Along the seaside, wherever there was a good harbor, fishermen . . . gathered in hamlets; and each returning season saw them with an ever-increasing number of mariners and vessels, taking the cod and mackerel, and sometimes pursuing the whale into the icy labyrinths of the Northern seas; yet loving home, and dearly attached to their modest freeholds.

Of [African] slavery there was not enough to affect the character of the people, except in the southeast of Rhode Island, where Newport was conspicuous for engaging in the [transatlantic] slave trade, and where, in two or three towns, Negroes composed even a third of the inhabitants.”

(History of the United States, From the Discovery of the American Continent, Vol. IV. George Bancroft. Little, Brown & Company. 1856. pp. 149-150)

 

Improved Arms for Gold

Since the early 1700s, New England merchants were engaged in the transatlantic slave trade which populated the American South with labor for the plantations. After Eli Whitney’s gin was invented in the 1790s, the owners of New England’s busy cotton textile looms ignored the moral and humane aspects of perpetuating slavery, being more concerned with profit and loss statements. Once war began in 1861, they focused on their government capturing Southern ports to reopen the supply of cotton.

Improved Arms for Gold

“September 6th – We are not increasing our forces as rapidly as might be desired, for the want of arms. We had some 150,000 stand of arms, at the beginning of the war, taken from the arsenals; and the States owned probably 100,000 more. Half of these were flint-locks, which are being altered. None have been imported yet.

Occasionally a letter reaches the department from Nashville, offering improved arms at a high price, for gold. These are Yankees.

I am instructed by the Secretary to say they will be paid for in gold on delivery to an agent in Nashville. The number likely to be obtained in this manner, however, must be small; for the Yankee Government is exercising much vigilance.

Is this not a fair specimen of Yankee cupidity and character? The New England manufacturers are furnishing us, with whom they are at war, with arms to fight with, provided we pay them a higher price than is offered by their own Government! The philosophical conclusion is, that this war will end when it ceases to be a pecuniary speculation.”

(Rebel War Clerk’s Diary at the Confederate Capital, Volume I. J.B. Jones. J.B. Lippincott & Co. 1866, pg. 78)

Gen. Hardee’s View – Spring 1865

Gen. Hardee’s View – Spring 1865

“A correspondent for the New York Herald, Theodore C. Wilson, had been at General Kilpatrick’s headquarters in Durham Station, awaiting an opportunity to get into the Confederate camp. General Joseph E. Johnston had agreed that he might come if he could find means of transportation. Early the next morning . . . Wilson somehow managed to secure a seat in the car with [General William J.] Hardee and [aide-de-camp Thomas B.] Roy and now headed off to Greensboro with them.

Exploiting his opportunity, probably as Hardee breakfasted, Wilson asked him for an interview, which Hardee granted, receiving him “in a very cordial, generous, unreserved manner.” In reply to a general question about the war and slavery, Hardee said:

. . . “I accept this war as the providence of God. He intended that the slave should be free, and now he is free. Slavery was never a paying institution . . . For instance, my wife owned about one hundred negroes; forty of the hundred were useless for work, yet she had to feed [clothe and maintain the health of] these forty to get in order to get the work of the other sixty. The negro will be worse off for this war. Will any of your abolitionists . . . feed and clothe half-a-dozen little children, in order to get the work of a man and woman?

Sir, our people can pay the working negroes a fair compensation for their services, and let them take care of their own families, and then have as much left at the end of the year as we had under the old system.”

(General William J. Hardee: Old Reliable. Nathaniel C. Hughes, Jr. LSU Stat University Press. 1965, pg. 297)

Cotton for the North and England

It is said that England in 1861 ran twice as many spindles as all other countries combined, with Lancashire at the center. The London Times editorial of September 19, 1861, stated that one-fifth of the entire British population was held to be dependent, directly or indirectly, upon the prosperity of Southern cotton, which accounted for 80 percent of the total English importation of raw cotton. Additional cotton was sent north to the busy cotton mills of Lowell, Massachusetts.

And it cannot be forgotten that it was Massachusetts tinkerer Eli Whitney who brought forth the cotton gin. This invention replaced the slow method of pulling seeds by hand, increased cotton crop yield and helped perpetuate African slavery in America.

Cotton for the North and England

“For ten years past whenever Southern threats of secession had been indulged in, the writers and politicians of that section had expanded upon cotton as the one great wealth-producing industry of America and as the one produce which would compel European acquiescence in American policy, whether of the union, before 1860, or if the South, if she should decide upon independence.”

A writer in DeBow’s Review declared “the South annually throws upon the world for the poor & the naked, [and] we are doing more to advance civilization . . . than all the canting philanthropists of New England & Old England will do in centuries. Slavery is the backbone of the Northern commercial as it is of the British manufacturing system . . .”

Before the Civil War was underway Charles Greville wrote to Clarendon: “Any war will be almost sure to interfere with [the South’s) cotton crops, and this is really what affects us and what we care about. With all our virulent abuse of slavery and slave-owners, and our continual self-laudation on that subject, we are just as anxious for, and as much interested in, the prosperity of the slavery interest in the Southern States, as the Caribbean, as the Carolinian and Georgian planters themselves, and all Lancashire would deplore a successful insurrection of the slaves [by northern abolitionists], if such a thing were possible.”

(Great Britain and the American Civil War. Volume II. Ephraim Douglass Adams. Alpha Editions, 2018 (original 1924), pp. 300-301)

War Millionaires of America

Undoubtedly the cause of the 1861 war was the purely sectional Republican party which emerged from the ashes of the Whig party, anti-immigrant Know Nothings, and Transcendentalists. Though it lost the 1856 national election, it would win in 1860 by a plurality with the addition of a high protective tariff which pleased the protectionist New England States. Though several Southern States which had not departed before February 1861 attended the Washington Peace Conference in an attempt to save the federal union, Lincoln had instructed his Republican attendees to avoid compromise.

War Millionaires of America

“The [Civil] war, author Charles Beard held, was an important determinant of industrial change after 1865 because of the manner in which industrial interests made use of the political power they had won. In Beard’s view, the ascendant Republican party was the tool of the new capitalist class. These capitalists were united in subscribing to the basic proposition that the government ought to foster industrial expansion. Successive Republican congresses duly accomplished this by enacting the national banking law, a high protective tariff, a contract labor law, lavish land grants to railroads, and the Homestead Act which in addition to giving land to settlers also expanded the domestic market.

One of the [Civil] war’s main effects was its contribution to “the extraordinary growth of heavy industry (iron, machinery, agricultural implements, lumber, clay products)” – a trend which characterized the whole period 1850-1880. While economic forces generated by the war worked to the advantage of heavy industry, [Louis] Hacker wrote [Triumph of American Capitalism, 1940], “the young industrial capitalism had by 1860 already formulated its political program for continued growth – “protectionism, a well-guarded banking system, and adequate labor supply, and expanding domestic market made possible by a federally-supported public works program.”

By the time the war had ended in 1865, Congress had virtually enacted this program, taking “a long step forward in placing the services of the state at the command of private enterprise.” The economic legislation of the war and Reconstruction periods comprised “a new and vital force” that shaped the course of postwar change. “The progress of industrial capitalism was at last being rendered secure,” Hacker concluded, and it was being done in the halls of Congress.

Mechanization was undertaken in response to heavy demands generated by the war, and in order to do this successfully, ever larger capital outlays were necessary for industrialists. This came from large-scale organizers who could tap “the reservoir of credit” produced by wartime profits and flotation of federal securities.

The result was a basic structural transformation – “the concentration of manufacturing capital in fewer hands than before, the construction of larger plants, and the appearance of a new class of war millionaires.”

(Economic Change in the Civil War: An Analysis of Recent Studies. Harry N. Scheiber. Civil War History, Vol. 11, No. 4, December 1965. pp. 398-400)

Woodrow Wilson’s Great Race to War

The outcome of “the war to end all wars” was punitive peace terms against Germany, the rise of German communism and the forced abdication of the Kaiser. This created a vacuum which was filled by a German nationalist intent upon retaliation for his country’s humiliation at Versailles. And so came another war.

Woodrow Wilson’s duplicity recalls Robert E. Lee’s late-1866 letter to Lord Acton: “I consider the consolidation of the States into one vast republic, sure to be aggressive abroad and despotic at home, to be the certain precursor to ruin which has overwhelmed all those that have preceded it.”

Wilson, it should be noted, won the presidency in 1912 in a three-way race with only 42% of the popular vote – 3% more than Lincoln accomplished in 1860.

Woodrow Wilson’s Great Race to War

“America believed itself to have declared war on Germany in April 1917 for noble reasons. To make the world safe for democracy, as the slogan went.

At bottom, however, the Allies had manipulated the American government with the same expertise they had shown from the start of the war. President Wilson, a Germaphobe long before 1914, was already predisposed to aid Great Britain. Although scrupulously neutral in public (Irish Americans being an important part of any Democratic politician’s constituency), in private he was unabashedly partisan. His administration did nothing to stop the Allies from borrowing large sums to finance their war efforts.

Loans were only one part of the complex pattern of aid extended before 1917. American manufacturers made war materials to Allied specifications and shipped them to Europe. To name two obvious examples: Winchester and Remington arms and ammunition, as well as Midvale Steel and Ordnance howitzers. In this and many other ways, the Allied armies of 1915 and 1916 were as heavily dependent on American war production as the Allied governments were on American cash.

Neither Allied apologists nor American defenders of President Wilson have been anxious to draw attention to the massive level of American support, since it invariably claimed that the US was provoked into going to war by German actions against American citizens.

From the German point of view, the issue was not if America would join with Great Britain, but when this would happen, and what effect it would have on the war. Could America get an army into the field before the Germans could win the war in the West outright? It had taken Great Britain, which in its own estimation had the most professional army in the world in 1914, nearly two years before it was able to deploy a force big enough to mount a sustained offensive effort.

Germany and the United States embarked on what can only be described as a great race to determine the war’s outcome.

(The Myth of the Great War: A New Military History of World War I. John Mosier. HarperCollins, 2001, pp. 303-305)

Lincoln’s New America

Lincoln’s New America

“The Civil War ennobled no one, except perhaps its central figure, but it brought enormous and probably inevitable changes in the north. Those States actually gained wealth, population and power between 1861 and 1865, during the concurrent destruction of the American Confederacy. War manufactures exploded industrial production, made agriculture prosper, and a flood of immigration from Europe more than replaced the blood and bone buried in the South.

Until 1861, the full effect of the Industrial Revolution had been held in check by the powerful agronomists from Virginia to Texas. With this check removed, the industrial States consolidated their gains swiftly.

While the war itself was moving political power irresistibly toward the federal capital in Washington, money power was centralized in New York through the wartime Currency Acts. And an enormous centralization, through economic expansion, was going on [with] Businesses and enterprises formed that soon transcended the States themselves.

The removal of real power to a national capital was the first necessity for an expanded transportation and industrial complex that lay across many States. The concentration of fiscal power in New York broke the monetary freedom of State legislatures. As business enterprise became more and more national and spread on rails, old boundaries were, and had to be, meaningless. All this would, in quick time, forge a new society.

The old American of a huge farming, small holder class with a tiny mercantile and professional elite was not gone; vast islands of it remained. But it was submerged in flooding money and roaring steam.

If the men and interests behind the rise of the new industrial America did not realize fully where they were going, they understood their basic imperatives well enough. They needed certain things from government: high tariffs on industrial products; business subsidies and the diversion of public finances to railroads; centralized money control; continued massive immigration to curb native workers and create a labor pool; and a hard money policy, without which a solid financial-industrial complex was difficult to build.

The political instrument of this new force was the new Republican party . . . [where] refugees from Whiggery found a home. As virtually all foreign observers have seen, the erection of the immense American politico-industrial-financial machine in 1861 was not pure destiny; it took a certain kind of genius.

[But] the new wealth was more monstrously maldistributed than it had ever been. Millions of northern workers were little better off, in grimy tenements and working long, tedious days, than Texas slaves; many, in fact, were cared for worse. Native-born workers, who had enjoyed decades of scarcity and demand, begged for a limit to flooding immigration as they were drowned.  In the 19th century they were hardly sustained by the 20th century illusion that they rose on each succeeding wave.”

(Lone Star: A History of Texas and the Texans. T.R. Fehrenbach. Collier Books, pp. 403-405)

Thomas Jefferson’s “Rupture”

Author Roger Lowenstein writes that on Christmas Eve, 1825, “Thomas Jefferson let out an anguished cry. The government of the country he had helped to found, half a century earlier, was causing him great distress. It was assuming vast powers, specifically the right to construct canals and roads, and to effect other improvements. Jefferson thought of the federal government in the most restrictive terms: as a “compact” or a “confederated fabric” – that is, a loose affiliation of practically sovereign States.”

Thomas Jefferson’s “Rupture”

“He was roused at the age of eighty-two to issue a “Solemn Declaration and Protest” against what he termed the “usurpation” of power by the federal branch. Jefferson was so agitated that he declared that the “rupture” of the United States would be, although a calamity, not the greatest calamity. Even worse, reckoned the sage of Monticello, would be “submission to a government of unlimited powers.”

Though Federalists led by Alexander Hamilton had sought to establish a strong central government, Jeffersonians adamantly objected. No fewer than six of President Jefferson’s successors vetoed or thwarted federal legislation to build roads and canals, improve harbors and riverways, maintain a national bank, [and] fund education . . .”

Had Jefferson survived until 1860, the federal government of that day would not have displeased him. Its main vocation was operating the postal service and collecting customs duties at ports, [and] its army consisted of merely sixteen thousand troops scattered mostly among a series of isolated forts west of the Mississippi. The federal payroll was modest . . . the civilian bureaucracy in Washington consisted of a mere two thousand employees.

The modest federal purse was supported by tariff duties and a smattering of land sales. Federal taxes (an unpleasant reminder of the English Parliament) were reflexively scorned. Then came the “rupture.”

The Republicans – [Lincoln elected in November 1860] – vastly enlarged the federal government . . . [and] accomplished a revolution that has been largely overlooked.”

(Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War. Roger Lowenstein, Penguin Books, 2022. pp. 1-2)